Is the physics engine capable of reproducing this effect of a ball oscilating due to a water jet? [video]
No, the fluid simulation system is independant of other simulation systems and can't interact with rigid bodies.

Rigid bodies can't be simulated with the fluid system either.


  Note that the simulator is not suitable for non-fluids, such as materials that do not “flow”. Simply setting the viscosity to very large values will not result in rigid body behavior, but might cause instabilities.




A workaround would be to simulate the rigid body before hand and "simulate" the fluid with placeholder objects, like force fields or other constrained rigid bodies or hand animation. That way it would appear as if the fluid system had an effect on the rigid body.
During the fluid simulation, the rigid body has to be set as a fluid obstacle. For the fluid simulation, it is irrelevant how the motion of the obstacle was created.
The fluid can't influence the rigid body.

Related questions:
Rigid body and fluid interaction
Fluid and hair interaction